🌎 Solana Overtakes Ethereum in Key Metrics

Solana vs. Ethereum: The Battle for Dominance

Solana and Ethereum have been competing for dominance throughout Q4 2024, with Ethereum securing over $850 million in institutional capital inflow to ETFs and Solana attracting over $300 million in cross-chain inflows within the past week.

Market experts and reports suggest that Solana is poised to beat Ethereum and replace ETH as the largest altcoin in crypto. 2025 is a pivotal year for Ether and Solana, with the latter’s competitive edge lying in DEX metrics and growth potential alongside rising capital inflows.

Key Areas of Competition

Solana has outpaced competitor Ether in several key areas in 2024, including app revenue, app fees, and decentralized exchange volume.

In terms of app fees, Ethereum garnered $311.1 million this month, against Solana’s $322.8 million. Solana outperformed Ethereum in App revenue in October and November 2024, with Ethereum clocking $93.56 million and Solana dominating with $140.95 million in December.

In terms of DEX volume, Solana leads with $67.43 billion, while Ethereum lags at $52.37 billion. Solana-based DEXes have observed a large volume of token launches and trades in Q4 2024, driving DEX volume on the SOL chain.

Catalysts for Solana Adoption

Solana ETF approval by the U.S. Securities and Exchange Commission could legitimize SOL and bolster the altcoin’s adoption among crypto market participants. Ethereum’s ETF adoption supported capital inflows to the altcoin, with ETH garnering over $850 million from institutional investors.

Solana gained over $300 million from different blockchains, of which $200 million was transferred from Ethereum, just last week. Solana-based DEXes are closing the gap with centralized exchanges in the crypto ecosystem, with advancement and scalability slowly bolstering the utility of DEXes and driving active user count higher every week.

“Solana is on track to cement itself as the dominant player in DeFi and on-chain applications by 2025. With its low fees, high speed, and growing ecosystem, it’s positioned perfectly to absorb the capital flowing into DeFi. The breakthroughs in DEX performance and scalability will continue to push centralized exchanges out of the way, shifting the focus to decentralized platforms that are faster, fairer, and more transparent.”

– Anmol Singh, co-founder of Zeta Markets

Technical Analysis Targets

Ethereum is trading close to its 2024 peak of $4,107, with a psychologically important $4,000 level on Tuesday. Ethereum’s previous all-time high is $4,878, and the cycle target is $5,185, the 161.80% Fibonacci retracement level of the rally from the November 4 low of $2,361 to the 2024 top of $4,107.

Relative strength index reads 61, below the 70 level, that typically generates a sell-signal. Moving average convergence divergence signals an underlying bearish momentum in Ethereum price trend.

Ethereum could find support in the zone between $3,252 and $3,680, as seen in the daily price chart, in the event of a correction.

Solana’s daily chart shows potential for gains in SOL, with a daily candlestick close above $231.62 marking the end of the sideways trend. Solana could face resistance at the $264.59 peak, and the cycle target is $359.81, the 161.80% Fibonacci retracement level of Solana’s price rally.

If Solana is faced with a correction, traders could mark $221.06 to $233.22 as the support zone for the altcoin.

Implications for Traders

Solana’s growing dominance in DeFi and potential ETF approval could lead to changes in portfolios, with Ethereum beta plays potentially suffering a correction in the event SOL dethrones ETH.

Traders should keep an eye on the following key areas: